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U.K. Journalist Ethics Panel Slams
Mirror Editor for Stock Column

By

Silvia Ascarelli Staff Reporter of The Wall Street Journal

Updated May 11, 2000 12:01 a.m. ET

LONDON -- The editor of the Mirror, a popular United Kingdom tabloid newspaper, was upbraided by a press regulatory body for violating and not enforcing journalistic ethics regarding share dealings. But the panel fell short of calling for any disciplinary action.

The newspaper's stock tipsters, dubbed the "City Slickers" after the name of their column, were deemed to have committed "flagrant, multiple breaches" of the U.K. journalistic code of practices, the Press Complaints Commission said. One of the two reporters writing the column bought shares on at least 25 occasions one day before articles describing them as the "tip of the day" appeared, and he sold them for a quick profit, the agency said. The two columnists were fired in March.

The findings are unrelated to any legal proceedings. The U.K. Department of Trade and Industry, which investigates allegations of insider trading, said its policy is not to comment on whether it is carrying out an investigation.

Code Violations

The press panel found that the newspaper's editor, Piers Morgan, had violated the code by not cracking down on the two City Slickers, and by buying shares in a computer maker,
Viglen
PLC, not long after the company's shares had been recommended in the column.

In a statement, the Mirror's owners, MGN Ltd., and Mr. Morgan said they accept the commission's findings "in full," and Mr. Morgan said he regretted his failure to enforce the ethics code. But a spokeswoman repeated earlier statements that Mr. Morgan had been exonerated in an earlier internal investigation and continues to have the support of his employers.

The two "City Slickers," James Hipwell and Anil Bhoyrul, now write an irreverent column for the biweekly humor magazine Punch under the City Slickers logo, and as "the tipsters who've been gagged by Fleet Street," as the U.K. newspaper sector is known. They're also writing a book about the stock market, tentatively titled "How to Make a Million in the City." Mr. Hipwell, who was found to have bought shares at least 25 times, said in a telephone interview that he wasn't surprised by the findings.

"I don't think the Press Complaints Commission rules are in readers' best interest," he said. "Journalists should be allowed to buy shares in companies they tip. If you're in the business of tipping shares, you're far more likely to tip good ones if you're risking your own capital."

Mr. Bhoyrul said in a telephone interview that he's already admitted that he broke the rules, although he hadn't known about the press code at the time. He also said that he was unconcerned about ruling. "I spoke to my present employers and they all think it's a bit of a laugh," he said.

Dow Jones
& Co., the publisher of The Wall Street Journal Europe and WSJ.com, and many other newspaper companies have a policy that prohibits reporters from owning shares in companies they write about.

The Press Complaints Commission criticized Mr. Morgan for failing to do anything beyond giving Mr. Hipwell a verbal warning after finding out in mid-1999 that the two men were violating ethical standards by investing in shares they were writing about. Mr. Hipwell, who didn't cooperate with the investigation, said he has no memory of that warning.

Mr. Morgan, the panel said, violated the code's provision that journalists shouldn't buy or sell shares in which they have written about "recently" by buying Viglen shares soon after they were tipped in the Mirror; they had been tipped regularly since July 1999 and were one of the top 10 tips for 2000. As editor, Mr. Morgan is responsible for the newspaper's content, the panel said.

Conflicting Accounts

The panel didn't rule, however, on whether Mr. Morgan in January knew the pair were about to tip shares in Viglen when he invested 20,000 pounds ($30,683 or 33,803 euros) in the company's shares a day before their column appeared on Jan. 18. Mr. Morgan said he bought the shares on the basis of a "general buzz" about the company, the fact that the City Slickers had tipped them in the past, and a relative's recommendation. He said he didn't know of the Slickers' plans and didn't discuss his purchase with them.

That version of events was contradicted by Mr. Bhoyrul, who this week submitted an affidavit to the press complaints panel in which he said that he discussed Viglen and the planned article with Mr. Morgan during the morning of Jan. 17. He also said that Mr. Morgan told him of his Viglen purchase that afternoon. The commission noted that Mr. Bhoyrul's statement differs from the statement he made to the Mirror's internal inquiry, but that it didn't need to decide which version was correct.

The Press Complaints Commission also found that Messrs. Hipwell and Bhoyrul also violated the ethical code by telling Tina Weaver, the Mirror's deputy editor, about Booth Industries a few days before it became the "tip of the day" in July 1999. It didn't make any finding regarding Ms. Weaver.